Investment Opportunities of the Electric Vehicle Industry in Taiwan I. Reasons to Invest in the Electric Vehicle in Taiwan A. Considering the international energy price and vehicles regulations, electric car would become the mainstream product in the future 14% of the global carbon dioxide comes from transportation systems, and 60% of the transportations use petrochemical fuel. Electric vehicles have better efficiency in terms of the energy utilization ratio of the fuel. Also, no carbon dioxide would be produced while using. As the pollution source of the power generator is easier to control, the developed countries such as European countries, Japan and US thus consider electric vehicles the key technologies to develop. The Chinese authorities even regard the commodification of electric vehicles as an important national strategy. Electric vehicles apparently have become the target that all countries aim to invest in. B. Taiwan has related industrial clusters Given the feature that electric vehicles need to employ lots of information and computer technology, Taiwan is able to assist the electric vehicle business developer and application developers thanks to its capacity in both electric and electronic field. The vehicle industry in Taiwan is good at developing middle-small sized vehicles and motorcycles. Meanwhile, Taiwan is able to develop the techniques of small-volume, large variety production in response to the local market needs. With the development and application experience of low-speed vehicles, Taiwan is a suitable environment for the electric vehicle industry to develop. The automobile components industry in Taiwan also has its strength as some of the vendors have already integrated into the international supply chain. For example, as for the electric vehicle produced by Tesla Motor, more than 70% of its components are procured from Taiwan, and the key raw material of the motor is made by the silicon steel produced by China Steel Corporation. As for the raw materials and downstream products that the electric vehicle motor need, Taiwanese vendors have 1

built the related technologies. Aside from participating in the plan of Future Steel Vehicle, several R&D center on material and motor are also established. Through the combination of both the industry and the academic field, Taiwanese vendors try to motivate the localization for the related technologies. 150 vendors of the Taiwan Electrical and Electronic Manufacturers’ Association (TEEMA) have formed a technical alliance. Considering the fact that the distance between south and north of Taiwan is very short, the commute time between each district is less than a day. Features such as apparently increasing needs for short distance car use in cities and the short driving kilometers within a single day make Taiwan a suitable environment for the development and testing of electric vehicles. Based on these advantages, Taiwan is suitable to serve as a pilot market. C. The ideal starting point to enter the new-energy automobile market in China In response to global energy trends, China’s Ministry of Technology has conducted a “One Thousand Vehicles in Ten Cities” pilot plan for new-energy automobile demo since 2009, which Chinese government gives direct subsidies to those who purchase new-energy automobiles. In March 2009, the document “Plan on Adjusting and Revitalizing the Auto Industry” was released, which is regarding the technological development of new energy vehicle. In 2010, Ministry of Technology, Ministry of Finance, Development and Reform Commission, and Ministry of Industry and Information Technology cooperated in this pilot, and renamed it into “Promoting Energy-Saving and New-Energy Automobiles in Public Area Demo Notification”. In 2011, along with China’s entering the 12th Five-Year Plan period, the new energy vehicle was listed in the major seven strategic emerging industries, which showed the importance of this industry. September 2013, the document “Notice of the Ministry of Finance, the Ministry of Science and Technology, the Ministry of Industry and Information Technology and the National Development and Reform Commission on Continuing on the Promotion and Application of New Energy Vehicle” was released. It proposed that the new vehicle industry will be strategically promoted from 2013 to 2015 along with a series of incentives, including financial subsidies for a range of new energy vehicles, e.g. electric vehicles, plug-in hybrid vehicles and fuel cell powered vehicles. So far, more 2

than 40 cities or regions in China were selected on the list of new energy automotive application. According to “Energy-Saving and New-Energy Automobiles Industry Plan (2012-2020)” from the State Council of the People's Republic of China, the sales of pure electronic vehicle and plug-in hybrid vehicle are expected to sum up to 500 thousand in 2015 and 2 million in 2020. The accumulated sales are expected to reach more than 5 million. According to the government statistics, the production and sale volume of new-energy automobile in China were 83.9 and 74.8 thousand respectively in 2014, which indicates the potential of market growth. Given the Economic Cooperation Framework Agreement signed between China and Taiwan along with related industrial cooperation projects, all make Taiwan as an ideal starting point to enter the new-energy automobile market in China. In particular, the automotive parts and accessories were already included in the Early Harvest List, while electric product industry became one of the key items in the project. Since the China market’s demand for new-energy automobiles is currently low and this market is therefore not suitable for mass production, Taiwanese vendors are more likely to serve such local market with its small-quantity and high variety productivity. In this sense, given the advantages coming from the ECFA and industrial cooperation projects between China and Taiwan, foreign companies can invest Taiwan as the springboard for exploring the Chinese new energy vehicle market. D. Taiwanese vendors’ demands in technology upgrade and system integration As Taiwanese vendors have high demands in next-generation electric technologies and large electric buses, international vendors’ strength in cell materials, motor controllers, light-weight motor materials, light-weight materials, cooling control, and electric bus chassis can just complement the local resources. The local vendors’ demands in electric technologies and platform products are expected to attract international enterprises worldwide to develop such technologies in Taiwan. So far there are enterprises from Japan, China, and United States that have reached cooperation agreement with Taiwanese enterprises. In the future, more international enterprises in electric technologies will be introduced, satisfying Taiwanese enterprises’ needs for such technologies.

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II. Introduction to the Main Vendors in Taiwan Below is the industrial supply diagram for electric vehicles industry in Taiwan.

Raw Material

Battery Materials – Cathode Material

Battery Materials – Anode Material

CAEC Shang-hua ALEEES HIROSE Battery Energy 6. LICO 7. MECHEMW 8. CoreMax 9. Tak 10. Guan-shih

1. Jhuang-yeh 2. China Steel Chemical Corporation 3. Tai-sung Motor 4. Long Time Tech

1. 2. 3. 4. 5.

Material Module

PHET AMITA C-Life PSI Power Source Energy 6. Molicel 7. Chang Hong 8. Guan Shih 9. Exa Energy Technology 10. Lico

1. 2. 3. 4. 5. 6. 7. 8. 9.

PHET Molicel Simplo GWA Energy DynaPack Celxpert LIFEBATT HT Energy Delta

Sub-system/ System

1. Nan Ya Plastics Corporation

Current Convertor Module

Battery Materials – Copper Foil 1. Co-Tech

1. Tatung 2. Shih-Lin 3. JustWin 4. TECO 5. Chroma 6. Holtek 7. Fukuta 8. Motion Technology 9. Ye Li 10. Universal Microelectronics 11. Delta 12. EVT 13. Shin Hsing

Battery Management System 1. 2. 3. 4. 5.

Motor Materials – Permanent Magnet

Chroma Delta KYMKO (Lite-On) LiFeTech Energy Renesas

Motor Materials – Magnetic Sheet and Strip

1. Delta 2. DaiDo Metal 3. Maigene Metal 4. TECO

Electric Motor and Motor Controller

1. Chia-li 2. TECO 3. Chroma 4. Ling Jhong 5. Rhymebus 6. Delta

Battery System 1. PHET 2. HT Energy 3. AMITA Technologies 4. Molicel 5. J. S. Power 6. DynaPack 7. Simplo 8. All-New Energy 9. Re-Deutsche 10. Wiz Energy

Battery Materials – Battery Electrolyte

1. Nan Ya Plastics Corporation 2. Coin 3. BenQ Materials

Battery Module

Battery Cell 1. 2. 3. 4. 5.

Battery Materials – Battery Separator

1. China Steel 2. Ta-Yea Steel

D.C. Motor Drive 1. Teco 2. Utrend 3. Stromag

Battery Controller/System (Power Management System) 1. 2. 3. 4. 5.

Chroma HT Energy Delta Rich Electric KYMKO (Lite-On)

Integration of Development Technologies System Intergration

1. 2. 3. 4. 5. 6.

Industrial Technology Research Institute Delta SGS ARTC TARC Lite-On (STI)

Bus

Self-owned Vehicle Technology

1. Hanergy 2. RAC Electric Vehicles 3. ALEEES

Minibus 1. China Motor 2. PHET 3. Yulong

Motorcycle and Other Mobility Scooter 1. 2. 3. 4. 5. 6. 7. 8. 9.

China Motor PHET E-Ton Meibruce SYM KYMKO PGO Scooter Yin-ke Lianda-Loncin

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Bicycle 1. 2. 3. 4. 5. 6. 7.

China Motor PHET Merida Giant Ideal Yin-ke Lianda-Loncin

Charging Station 1. 2. 3. 4. 5.

Other

Taiwan Power CPC Leader AC Power Well Shin

Vehicle Assembly 1. Zhone Zhun

In-Vehicle Jack/Connector 1. Hu Lane

Source: CDRI, 2011

Figure 1

The structure of electric vehicle industry in Taiwan

A. Vendors of in-vehicle motors 1.

Fukuta Elec. & Mach. Co., Ltd Specializing in electric motor production, Fukuta Motor cooperated with Tesla

and ACP and produced world’s first electric roadsters available on the market. Fukuta Motor became one of Toyota’s official partners because of its partnership with Tesla. With re-investment, Fukuta Motor founded Jin-Fu-Tian Technologies, Shanghai Sin-Yong Electronics, Yong-Tai-Fong Technologies, and Huan-Yu Inc. and formed an EV Green Energy Eco-Power Alliance to develop next-generation automotive motors by aligning with the trade and local R&D organizations. Fukuta Motor has succeeded in taking part in the global supply chain of electric parts and accessories. In the future, it is expected to have technology cooperation by partnering with vendors worldwide, starting a new era of electric commercialization. 2.

Delta Electronics, Inc. Delta Electronics has manufactured power products for more than 40 years. In

2011, it started to develop the charging technologies on electric vehicles and extended the cooperation project in Europe and Taiwan. One of the projects is located in the Sun Moon Lake, Taiwan, serving the electric vehicles for roundabout lake tours. Moreover, Delta Electronics has been aggressive to explore the market of automotive electronics in China. It demonstrates its capabilities in developing and manufacturing electric parts and accessories. Delta Electronics has been cooperating with Shanghai GM to develop motor systems and onboard chargers for Chevrolet Sail pure electric editions (Table 1). It has also gained the opportunities to work with other automotive vendors in China and to supply electric power package modules.

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Table 1

The partnership between Delta Electronics and Shanghai GM

車輛品牌

製造廠

Automotive Brands

GM Chevrolet Sail 純電動版

GM Chevrolet Sail – Pure Electric Edition

Manufacturers

上海通用(新能源汽車目錄-25批)

Shanghai GM (new-energy vehicle catalog – batch 25)

Energy-Storage

儲能系統

Systems

Power Systems

動力系統

磷酸鐵鋰

東莞新能源科技有限公司 LiFePO4

Amperex Technology Limited

Module Voltage 3.2 V / Total Voltage 307.2 V / Total Capacity 60 Ah 模組電壓3.2V／總電壓 307.2V／總容量60Ah Permanent Magnet Synchronous Motors

永磁同步電機 (PMSM)台達電子工業股份有限公司 and Motor Controllers 及電機控制器

Delta Electronics

Power 50 KW / Peak Power 85 KW

Onboard Chargers

車載充電機 Charging Connectors

功率50KW／峰值功率為85KW

Delta Electronics

Input Voltage 96-264 V / Power 3 KW 台達電子工業股份有限公司 Amphenol PCD Shenzhen Co., LTD

輸入電壓96~264V／功率3KW

Charging Socket ASZ52541 / Charging Socket ASZ52542

充電連接器

費諾精密連接器(深圳)有限公司

充电插座型号ASZ52541／充电插头型号ASZ52542

Besides, Delta Electronics has developed electric charging and service systems, and is qualified to participate in the electric demo pilot in Taiwan. In terms of electric charging solutions, it is able to provide AC/DC charging equipment, charging station monitor systems and charging network management systems, with over 94% of transfer efficiency to considerably decrease the operating cost and carbon emission volume. In 2015, Delta Electronics became the supplier of charging system to Ford group, which integrated the household power management modules so as to assure the energy safety.

B. Vendors of battery materials 1. Changs Ascending Enterprise Co., Ltd. (CAEC) CAEC’s key products are lithium battery LiFePO4 materials, lithium batteries, polymer batteries, and technology transformation in lithium and polymer batteries consultant services. Its clients include Jinshan Battery, Formosa Plastics Chang-Gung, Ford, Chrysler, UMC, Pfizer, and Institute of Nuclear Energy Research, etc. The battery LiFePO4 materials and production procedures from CAEC are highly competitive in the global market. It has developed next-generation iron-sodium cathode materials, which are combined with low-cost elements such as hydrochloric acid and oxalic acid and made into powders, potentially decreasing the production 6

cost. In 2008, Formosa Energy & Material Technology was jointly established by CAEC and Formosa Group, and changed its name to “Formosa Lithium Iron Oxide Corp” in 2012. The company engaged in developing a new generation of green energy materials - Lithium Iron Phosphorous Oxide Cathode Material, including R&D, production and sales. The monthly productivity is up to 400 tons. This company has supplied various power storage system plants for electric vehicles, large non-interruptive systems, LED streetlamps, and solar energy batteries. 2. LanYang Energy Technology LanYang Energy Technology develops, produces and sells LiFePO4 batteries. Taking advantages of electrochemistry and electricity/electronics/electrical control technologies from Taiwan and China, it uses LiFePO4 cathode materials for power batteries with features of low cost, dense energy, secure stability, long life cycle and eco-friendliness. The powder of LiFePO4 can be applied to electric vehicles (such as e-bikes,

e-scooters,

e-cars

and

e-buses),

portable

electrical

power

tools,

non-interruptive power supplies and solar energy storage systems. In alignment with Industrial Development Bureau, Bureau of Standards, Metrology & Inspection, Metal Industries Research & Development Centre, and Automotive Research & Testing Center, LanYang Energy Technology is now promoting the standardization of LiFe power batteries, and has implemented the standard module specs for three e-vehicles (24V/30Ah, 36V/30Ah and 48V/30Ah), accelerating the industrial standardization and verification processes in the future. In 2015, LanYang Energy Technology will upgrade its existing products and launch LiFePO4 12V12Ah power batteries for motorcycles and 12V25Ah power batteries for vehicles. 3. Pihsiang Energy Technology Co., Ltd. (PHET) PHET’s main products include Li-CO battery cells for 3C electronics. In 2005, PHET cooperated with Phostech Lithium based in Canada to develop LiFePO4 battery material production technologies, and was authorized with patent. In the same year, PHET started producing LiFePO4 batteries, and became the only professional vendor to provide such batteries made by PHET in Taiwan, with no risk of patent violation. In November 2014, PHET built cooperation ties with China Shuang Lu 7

Group to jointly explore the emerging market of power system for electric vehicles. The cooperation projects focus on battery systems, power-saving stations and solar power stations. 4. Advanced Lithium Electrochemistry (ALEEES) ALEEES is a cathode-material vendor with a patent on LiFePO4 materials. Its patented product, LFP-NCO, is characterized with the advantages of high quality and reasonable cost. Thus ALEES is able to provide LiFePO4 materials to Asia and satisfy the demands in China and Asia markets. In September 2014, ALEEES signed the cooperation MOU with Sony Energy so as to integrate resources then explore the new technologies. In addition to developing battery materials on its own, ALEEES participates in the design and manufacturing of electric buses. Moreover, in February 2015, ALEEES got the production certificate of electric buses in China and allowed to operate the business. So far this company has received a few orders from some Asian countries, and is expected to be one of its main vendors in professional batteries and electric systems.

C. Body design and manufacture 1. Hua-Chuang Automobile Information Technical Center (HAITEC) Co., Ltd. HAITEC specializes in vehicle design development. The company engaged in R&D and designing for Yulon Motor Co., Ltd and other Chinese companies. The major research and development project includes: traditional vehicle design, electric vehicles and related components, automotive electronic systems and components. In response to trend of energy saving, its motor system efficiency can reach up to 180 kw (about 240 hp) and be applied to various types of vehicles, such as coupes, passenger vehicles, SUVs, and medium/large buses. It currently focuses on the development of electric platform technologies and the research of plug-in hybrid vehicles (the development of which will be the focus in the future). HAITEC is expected to be the leader in developing all electric technologies.

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2. RAC Electric Vehicles Inc. RAC’s homemade pure-electric & low-chassis buses are the first electric buses certified by Taiwan government. Its key products and services include electric buses, electric parts and accessories, and electric commercial vehicle planning and manufacture. Nowadays RAC has been the top supplier of electric buses in Taiwan, which products are operating in several cities, including New Taipei City, Taoyuan, Hsinchu, Hsinchu Science Park, Taichung, Sun Moon Lake, A-lisan, Kaohsiung, Pingtung, etc. In addition, RAC’s also exports its buses to foreign markets such as Philippines.

III. The opportunities in Electric Vehicle Demo Pilot in Taiwan In 2010, the Taiwan government approved “Intelligent Electric Vehicle Development Strategy and Action Plan,” setting up over ten pilots across the country and involving around 3,000 vehicles. This plan will promote the use of intelligent electric vehicles, innovative service modes and integrated infrastructures. Taiwan government invested 2.2 billion NTD to facilitate the implementation of electric vehicles in the main urban areas. In May 2014, the second stage pilot plan was approved which includes initiatives such as replacing the city buses by electric ones, introducing electric buses for school or business shuttle services; building up the comprehensive supply chain of electric vehicle with holding the key technologies; encouraging the development of new model of electric vehicle, etc. (Table 2) According to the website “Pilot Project for Intelligent EV, Ministry of Economic Affairs, R.O.C.”, there are eight cases accepted by Ministry of Economic Affairs and implemented, including Taichung City Government, CARPLUS AUTO LEASING COPORATION, Tainan City Government, HOTAI MOTOR CO.,LTD., New Taipei City Government, Green Kaohsiung & Pingtung(*), Hsinchu Science Star(*), and Taiwan Semiconductor Manufacturing Co., Ltd. The project included 378 electric automobiles, 30 trolleybus, and 454 battery charging stations. (Table 2) 9

Table 2

The progress of the electric Vehicle pilot in Taiwan

Project Name

Scale

Conducting Organization

Taipei Metropolitan Low-carbon CarPlus, Nissan Taiwan and Luxgen Travel Plan

• 100 Vehicles • 102 Charging Stations

World’s Greater Taichung, Your Dream Eco-city: Green Transportation Project

• 100 Vehicles • 161 Charging Stations

Taichung City Government, Nissan Taiwan and Luxgen

• • Intelligent Electric Vehicle Pilot in Tainan City Government, Luxgen and • Tainan city CarPlus • • New Taipei City Electric Vehicle New Taipei City Government, Pilot Plan Luxgen and CarPlus • Hsinchu County Government, • The City of Hope, Glamour and RAC Electric Vehicles and Technology • Yosemite Bus South Taiwan Bus, Kaohsiung • Green Kaohsiung and Pingtung Bus, Pingtung Bus and RAC Green Bus Transportation Project • Electric Vehicles Kuo Ching Tour Company, • TSMC Electric Shuttle Buses RACElectric Vehicles Inc., Intelligent EV Pilot Project Taiwan Semiconductor • Manufacturing Company Sun-Moon Lake Area Intelligent Electric Vehicle Pilot Plan

Hotaimotor and Easyrent

38 Vehicles 32 Charging Stations 28 Vehicles 63 Charging Stations 90 Vehicles 44 Charging Stations 21 Electric Bus 21 Charging Stations 22 Vehicles 22 Charging Stations 9 Electric Bus 9 Charging Stations

Source: Pilot Project for Intelligent EV, Ministry of Economics (2015.08)

IV. Summary Since electric products and their parts/accessories are the key development techniques for automotive industry in the future, Taiwan and China have chosen them as one of the pilot in the Bridging Project. We expect that the growth of electric vehicles will soon come into being, and the demand will significantly increase after the infrastructures are gradually completed. Taiwan has the technology and productivity for electric vehicles, and its vendors have demands in technology upgrade and international cooperation. Therefore international electric vehicle enterprises are able to find vendors to cooperate with, and items to work on in Taiwan, entering the China market through the Bridging Project. The domestic electric vehicle pilot will generate demands in electric vehicles, charging systems, and service networks, while vendors participating in the project can learn how to improve products and systems performance from various project items. Thus, the Living Lab that Taiwan provides is able to help local and global vendors accelerate the commercialization of technologies, prompting Taiwan to become the R&D center for international electric vehicle industry. 10